Gold jumps 1% as dollar rally stalls ahead of US jobs data
Gold prices jumped more than 1 per cent on Friday as the dollar slipped ahead of a US jobs report that could signal the Federal Reserve’s rate-hike trajectory.
Spot gold rose 1.3 percent to $1,649.93 an ounce by 1054 GMT, and was up 0.4 percent for the week. US gold futures also rose 1.3 per cent to $1,652.90.
The dollar index fell 0.5 per cent, making greenback-priced gold more attractive to overseas buyers.
“Investors are still digesting the Fed’s comments and there is some more optimism today, with markets trying to focus while uncertainty still dominates,” said Carlo Alberto de Casa, external analyst at Kinesis Money.
The US central bank this week raised interest rates by 75 basis points for the fourth time in a row, but also signaled it could be nearing an inflection point for the fastest tightening of monetary policy in 40 years.
Thursday’s figures last week saw an unexpected drop in the number of Americans filing new claims for unemployment benefits. All eyes are now on US non-farm payrolls data for October at 1230 GMT.
A Reuters poll showed non-farm payrolls increased by 200,000 jobs last month after adding 263,000 jobs in September.
Mr. de Casa said, “Any figure above expectations could prompt investors to bet on further rate hikes (pressure on gold and stocks), while the numbers are lower than forecast – in this strange scenario – Could be positive for gold and stocks.”
Gold is considered an inflation hedge, but high interest rates affect the appeal of a non-yielding asset.
OCBC FX strategist Christopher Wong said: “Interest rates are likely to remain high, but a slow pace of increase may see a moderate decline in gold prices.”
Spot silver rose nearly 2 percent to $19.86 an ounce, and was headed for weekly gains.
Platinum and palladium rose 1.6 percent to $933.51 and $1,829.75, respectively, both of which are set for weekly losses.
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